Denmark has just become the first country in the world to launch a tax on junk food, which some people are calling a ‘fat tax’. Any foodstuff that contains more than 2.3% saturated fat will be subject to a tax of 15 Danish krone (£1.84) per kg of saturated fat in the product. This will raise the price of a small pack of butter by 25p, and a burger by about 10p for example. The idea behind this is to make fatty foods more expensive and thus reduce the number of people who consume them; the Danish government is hoping the fat tax will cut down saturated fat consumption by about 10%.
One of the main problems behind the so-called ‘fat tax’ is that there isn’t a real substitute product for fat; if the price of fatty foods is increased people will have to keep buying them in the short term because there is no real alternative in terms of their flavour. This will just increase food price inflation which is already running at a record high and will put even more consumers out of pocket. Hopefully over the long term it should decrease the amount of fatty products sold.
It is the same argument for cigarettes; the UK government taxes cigarettes highly and there is no substitute so people keep buying them and the government gets a large amount of money from the tax. In the long term it has led to people seeing cigarettes as less socially acceptable and overall consumption has dropped significantly over the last decade, but in the short term there was little that smokers could do to change their habits.
Since the UK is the ‘fattest’ nation in Europe, should we follow the Danes’ lead and put a tax on fast food? Denmark is already a very ‘slim’ nation and they seem to enjoy exercise so there seems little need for them to have a fat tax. However, more adults are getting obese in Denmark and they are worried they are getting to the same trend that the UK is following, hence the reason for imposing the tax on junk food.
The UK obesity epidemic is forecast to cost the government about £32bn a year from 2050, the vast majority of this avoidable if action is taken to curb our weight. We’ve had our chance to look after ourselves; maybe the next step to help us is by taxing us? Watch this space.